Spectrum trading gets green light

Mobile operators can now start trading 2G and 3G radio spectrum with each other, after getting the go-ahead from regulator Ofcom on Monday.

Mobile operators can now start trading 2G and 3G radio spectrum with each other, after getting the go-ahead from regulator Ofcom. Photo credit: Jon Yeomans

The new rules, which come into force on 4 July, cover spectrum in the 900MHz, 1800MHz and 2.1GHz bands. Once UK providers can buy and sell the spectrum, they will be better placed to meet increasing demand for mobile speech and internet services, according to Ofcom (PDF).

"By allowing operators to trade their spectrum, Ofcom believes that there will be greater opportunity to use it more efficiently," the regulator said in a statement. "Ultimately, it is believed that this will bring benefits to citizens and consumers in terms of improved mobile services."

O2 welcomed the announcement. However, there was markedly less enthusiasm from Three, the only big operator in the UK to own only 3G 2.1GHz spectrum and no 2G spectrum.

Spectrum in the 900MHz and 1800MHz bands was given to operators in the 1990s for next to nothing. Initially, it was earmarked for use for 2G services only. In January, however, Ofcom began allowing operators with 2G spectrum to 'refarm' it for 3G services.

According to Three, Ofcom's latest move "simply allows those who have been gifted access to public spectrum to profit from it, with no benefit for UK taxpayers".

"Ofcom's ambition to deliver faster and more capable services to consumers is best served by a truly competitive allocation of this public asset," a spokesman for Three told ZDNet UK.

Experts have been advising that spectrum should be made available for trading for about a decade, and in July, the government told Ofcom to get on with making it so. The regulator duly launched a consultation on the matter in February.

The introduction of spectrum trading was necessary in order to let Everything Everywhere get rid of 15MHz of its 1800MHz spectrum. This was a European Commission-imposed condition for the merger between T-Mobile UK and Orange UK that gave birth to the company.

In its assessment of the responses it received during its consultation, Ofcom noted that Vodafone and Everything Everywhere had argued against ex ante regulation — that is to say, the regulator getting to look at competition concerns before spectrum trades take place — while Three and BT had argued in favour of such rules.

"We will consider on a case-by-case basis whether to undertake a competition assessment," Ofcom concluded in its statement on Monday. "In making our decision, we will consider whether the proposed transfer raises sufficient competition issues to justify a further assessment."